Sorry, I should have been more clear. They don't make $$ on the dvr or web stuff directly, but they draw in viewers and build their audience over time. That in turn makes the network the $$ from the ads (and in the case of basic cable, sub fees).
I mean, who 10 years ago knew who Stewart or Colbert were? (I knew of Stewart, but not Colbert).
Both of their shows (esp in the early years) must have been dirt cheap to produce and air, so as long as they could get good buzz and build viewers over time, it was a workable business model with room for organic growth.
Same approach with some of the cable drama offerings. Smaller scale budgets, edgier creativity and writing, and growth through word-of-mouth, web viewing, etc instead of being the big, expensive 'Must See TV' show on the right timeslot and the right channel that gets 4 episodes to draw a huge audience or get pulled.
So, given that some think Conan still faced a tough road competing directly against Letterman and Leno on network tv from Fox, this is a great alternative for him, IMO.
He can be edgier. He can lob tomatoes from basic cable land that will get linked all over youtube and draw in more viewers. He can be wacky (which he does well) and grow an audience without worrying about market share for a good long while. And the bar for success is lower. I'm sure his target numbers are way different on TBS in that timeslot than they would be on Fox, especially because all the Fox stations were already bitching about losing their revenues from showing syndicated stuff during the late news hour. Conan could have faced a station revolt like Leno if things didn't work out on Fox.
